Vietnam is currently embroiled in a maritime border dispute with China, after Beijing deployed an oil rig at the Paracel islands, an area which Hanoi said is within its 200-nautical mile economic zone.

"The risk of conflict will disrupt these huge flows of goods, and have unforeseeable impact on regional and world economies. It may even reverse the trend of global economic recovery," Dung told participants of the World Economic Forum on East Asia in Manila, noting that two-thirds of global trade pass through the South China Sea.